Direct Sharedeal Limited Went Bust

Glasgow-based stock broking firm Direct Sharedeal Limited has now been declared in default for the purposes of FSCS, which is inviting claims against the firm.

DSL specialises in spread betting and share dealing.

Paul Finn and Michael Field of Finn Associates were appointed as joint administrators of Direct Sharedeal Limited on 12 April 2011 and were subsequently appointed joint liquidators of the company on 12 April 2012.

The FSCS expects that some customers of the firm may have claims relating to either shares or contracts for difference (CFD) investments.

Any customer of Direct Sharedeal Limited who believes they may have a protected claim against the firm are urged by the FSCS to contact its Initial Contact Team to request an FSCS claim form.

The FSCS said it will also be contacting all customers who have previously registered a claim with the firm’s joint liquidators inviting them to make a claim with FSCS.

For investment claims against Direct Sharedeal Limited FSCS can pay up to £50,000 in compensation per eligible claimant, it said.

In February 2010, the Financial Services Authority fined the firm £101,500 after its appointed representative, First Colonial Investments LLP (FCI), used misleading sales pitches which failed to set out the inherent risks of buying penny shares.

“It provided an avenue for FCI to carry out penny share sales, and should have made sure that FCI was providing customers with accurate and sufficient advice to make informed decisions about whether to invest in penny shares,” the FSA then said.

First Colonial Investments LLP was a stock broking firm based in London and had customers from around the UK. It advised on, and dealt in, shares that have been admitted to trading on the Alternative Investment Market (AIM) and PLUS market, as well as shares in companies that were seeking to be admitted to these markets.

The FSCS is still gathering the evidence it requires to support claims in relations to CFD investments, and will provide a further update on its website regarding this category of claim as soon as more information is available.